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Executive Summary	April 12, 2013

The Economy The U.S. economy appears to be muddling through, with a weak recent jobs report being counterbalanced by improvement in the manufacturing and service sectors. On the jobs front, the Labor Department last week said the private sector added just 95,000 jobs in March, a little over a third of what it added in February and a little over half of what it added in January. The unemployment rate (which is calculated using a separate survey) fell, however, to 7.6%. The decline was due to the fact that the number of people not in the labor force increased by 663,000 for the month, meaning that those people were not included as "unemployed" in the headline rate. Many have presumed that means more and more workers are getting discouraged and giving up on getting work. But, the "U-6" unemployment rate, which, unlike the headline number, takes into account people who have given up on looking for a job, fell sharply, to 13.8%. It's unclear why the labor force would decline so much, if discouragement was not the cause. It may simply be that there is a lot of noise in these numbers from month-to-month. We will get a better idea if this is a trend (and, if so, what is behind the trend) with next month's report. Better news came from the weekly unemployment claims data. New claims are down about 3% since our last newsletter, and are now more than 9% below where they were a year ago. Other parts of the economy also offered encouragement. The manufacturing sector expanded in March for the fourth straight month, though it did so at a slower pace than the previous two months, according to the Institute for Supply Management. The group's New Orders and Employment sub-indices also both remained in expansion territory, with growth in the former decelerating and growth in the latter accelerating. The service sector, meanwhile, expanded for the 39th straight month, according to ISM. It said new orders increased and employment conditions improved during the month, though at slower paces than the previous month. The housing market also continued to provide good news, though the data involved was more dated than the jobs data. According to the latest S&P/Case-Shiller Home Price Indices report, in January, home prices across 20 major U.S. cities jumped a full percentage point, putting them 8.1% above where they were a year ago. That was the biggest year-over-year jump in nearly seven years. Consumer data was also positive. According to the Commerce Department, personal income rose 1.1% in February and real disposable income rose 0.7%. Consumers increased their spending by 0.3% during the month, which meant that they also increased their personal savings rate by 0.4%. Since our last newsletter, the S&P 500 returned 1.5%, while the Hot List returned 1.3%. So far in 2013, the portfolio has returned 13.6% vs. 11.7% for the S&P. Since its inception in July 2003, the Hot List is far outpacing the index, having gained 208.0% vs. the S&P's 59.3% gain. The Bull Turns Four Last month, the bull market that began in March 2009 hit its four-year anniversary. Since then, the S&P 500 has kept on pushing higher, eclipsing its pre-Great Recession/Financial Crisis high and closing in on the 1,600 mark. All of that, plus the seemingly neverending concerns about the global economy, have many wondering whether the bull is nearing its final days. After all, four years does sound like a long time, particularly given the myriad of troubles the world has been confronting lately -- the European debt crisis, U.S. budget sequestration, potential housing market troubles in China. To get an idea of where we stand in historical terms, I recently looked back at a number of past bull markets (and bears) to get an idea of how this bull stacks up against others. History, they say, doesn't repeat, but it does often rhyme, so the past may let us understand the present and future a bit more clearly. I looked back at all of the bull markets since 1957, the year that the S&P 500 benchmark came into its current form. The current bull is the tenth bull market since then. For the previous nine, the average duration was right at 48 months -- four years. Five of the nine lasted longer than four years, with the longest being the 1990-2000 bull market, which lasted 115 months. During those past nine bulls, the S&P gained an average of 165.7%. As of afternoon trading on April 11, the current bull was up 135.9%. (By comparison, bear markets tend to be much shorter in duration and smaller in magnitude than bulls. The average of the last ten bears going back to 1956 was just 15 months, and involved a loss of 34.3%.) The current bull is thus by no means atypical in terms of how long it has lasted, nor is it atypical in terms of the overall gains it has produced. It has, however, proceeded more rapidly than many post-1956 bulls. For the five previous bulls that lasted at least four years, the average gain through the end of Year 4 was 81.2% Through its first four years, the current bull was up 129.3%. Still, that's not the most rapid rise -- the 1982-87 bull gained 137.6% in its first four years. So again, nothing unheard of with this bull run. While the current bull is near historical averages in terms of length and magnitude, the real lesson of past bulls isn't that you should expect a bull market to last a particular period or involve a particular level of gain. Instead, the lesson seems to be just how diverse bull markets can be. While the average length of one since 1956 is four years, individual bulls have ranged from 26 months (1966-68) to nearly 10 years (1990-2000). And the range of their gains was even broader: At the low end was that 1966-68 bull, when the market gained 48.0%. At the high end, the 1990-2000 bull gained 417.6%. There has also been variation in terms of when a bull market (defined as a gain of at least 20% following a bear market, which involves a loss of at least 20%) eclipses its previous high, and, by how much it does so. At their four-year marks, three of the five previous bulls that lasted at least 48 months were at a level above the previous bull market's high. Two (1974-80 and 2002-07) were not. The 1957-61 bull was among those that had beaten its previous high at the four-year mark; it lasted just two more months. The1974-80 bull was still below its previous high after four years; it went on for over two more years. That might make it seem like it's a bad thing to be above previous highs through Year 4 -- less room left to run, right? Not so fast. The 1990-2000 bull was well above its previous high at the four-year mark, and it went on for another six-plus years, with the S&P surging from 459.04 on its fourth birthday to over 1,500 by the time the bull run was over. All of this supports the idea that, with so many factors affecting stocks at any given time, getting the timing right on bull and bear markets is incredibly hard, if not impossible. Just because the bull market has been going on for only two years, that doesn't mean it has a long way to go -- had you jumped into stocks just two years into the1966-68 bull, you'd have been met only two months later with a bear market, one in which the S&P would decline more than 36%. On the other hand, just because a bull has gone on for four or five years or six years, that doesn't mean it's due for an end. If you jumped out of stocks at the four-year mark of the 1974-1980 bull market, you'd have missed out on gains of nearly 40% more over the next two years. Had you jumped out at the four-year mark of the 1990-2000 bull, you'd have done even more damage to your portfolio -- the market gained another 230% before the bull ended. Using other factors to time bulls and bears can also lead to trouble. The 10-year cyclically adjusted price-earnings ratio on the S&P 500 crossed 32 in July of 1997 -- twice its historical average of 16. But while that might seem like a sign to bail on stocks, the S&P rose from under 900 to over 1500 over the next three years or so -- even though the 10-year CAPE stayed above that level 32 mark the whole time. Similarly, the 10-year CAPE fell below that long-term average of 16 in June of 1973, about five months after a bear market had begun. Was that a "buy" signal? Not a very good one. The CAPE kept on falling, and the bear lasted another 16 months or so, with the S&P falling another 40% from the start of June through the October 3, 1974 market bottom. At the end of the day, given that bull markets tend to last longer and involve far greater gains than bear markets, an investor's best move is more often than not just staying the course and sticking to a long-term strategy through both bears and bulls. That's what Peter Lynch, one of the greatest mutual fund managers of all time, once told PBS. Lynch said that 10% declines in the market had occurred in more than half the years in the 20th century; 25% declines had occurred, on average, every six years. "They're gonna happen," Lynch said. "If you're in the market, you have to know there's going to be declines. And they're going to cap and every couple of years you're going to get a 10% correction. That's a euphemism for losing a lot of money rapidly. And a bear market is a 20-25-30% decline. They're gonna happen. When they're gonna start, no one knows. If you're not ready for that, you shouldn't be in the stock market." When one of the greatest investors of all time says that no one --not even himself -- knows when bulls and bears are going to start and end, that says something. Trying to time the market, particularly based on individual pieces of data or, even worse hunches or gut feelings, is a very dangerous path for an investor. That's why we prefer to stick with a long-term, disciplined strategy during good times and bad. Yes, that means there will be some rough periods. But historically, the market has followed every bear with a bull --even after the Great Recession and financial crisis a few years ago, despite the fact that many believed financial Armageddon was upon us and stocks were "dead". Plus, the biggest gains often occur in a bull market's early stages, meaning that if you wait until you see a sustained upswing and feel comfortable, you may well miss out on major gains. All of this is why we will continue to stay disciplined and stick with our long-term strategy, regardless of how long or far a bull market has run, or how long or far a bear market has run. As long as there are fundamentally sound stocks of solid companies out there -- and right now there are plenty -- we'll keep buying them. And over the long haul, I think we'll continue to post some very strong gains despite inevitable short-term ups and downs -- much better gains than the vast majority of those who try to call market tops and bottoms.		Editor-in-Chief: John Reese Since Inception   Hot List 208.0% S&P 500 59.3% Accuracy 56.5% Beta 1.2 YTD   Hot List 13.6% S&P 500 11.7% Since Last Issue   Hot List 1.3% S&P 500 1.5% Avg. Fundamentals   Market Cap (mil) $40,237 PE Ratio 9.6 5 Yr EPS Growth 15.7% Yield 2.7% Rel. Strength 67 Portfolio Sectors Energy 4 Services 2 Technology 1 Transportation 1 Financial 1 Conglomerates 1
Advertisement Validea Capital Management - Private Portfolio Management Based on Strategies of Legends Are you looking for an alternative to your underperforming mutual funds or financial advisor? Click here to download Validea Capital's investment kit and learn more about the firm's guru-based portfolios. Get More Information on Validea Capital! ** Validea Capital Management is a separate investment advisory firm managed by Validea.com founder John Reese. Thre information above in not intended as personal investment advice and should not be interpreted as such. The Fallen As we rebalance the Validea Hot List, 4 stocks leave our portfolio. These include: Starz (STRZA), Jos. A. Bank Clothiers Inc (JOSB), Dollar Tree, Inc. (DLTR) and Lear Corporation (LEA). The Keepers 6 stocks remain in the portfolio. They are: The Tjx Companies, Inc. (TJX), World Acceptance Corp. (WRLD), Telecom Argentina S.a. (Adr) (TEO), Usana Health Sciences, Inc. (USNA), Royal Dutch Shell Plc (Adr) (RDS.A) and Lukoil (Adr) (LUKOY). The Newbies We are adding 4 stocks to the portfolio. These include: Western Digital Corp. (WDC), Statoil Asa(Adr) (STO), Saia Inc (SAIA) and Hollyfrontier Corp (HFC). Portfolio Changes Additions   WESTERN DIGITAL CORP. WDC STATOIL ASA(ADR) STO SAIA INC SAIA HOLLYFRONTIER CORP HFC Deletions   STARZ STRZA JOS. A. BANK CLOTHIERS INC JOSB DOLLAR TREE, INC. DLTR LEAR CORPORATION LEA Newcomers to the Validea Hot List HollyFrontier Corp. (HFC): Formed when Holly Corp. merged with Frontier Oil in 2011, Dallas-based HollyFrontier ($10 billion market cap) is one of the U.S.'s largest independent petroleum refiners. It has operations in the Midwest, Southwestern, and Rocky Mountain regions, operating five complex refineries. HollyFrontier, like other refiners, has been hit hard since proposed cleaner gasoline standards were announced a few weeks back. But my models think investors have overreacted. The stock gets strong interest from my Kenneth Fisher-, Benjamin Graham-, and Joel Greenblatt-based strategies. To read more about its fundamentals, scroll down to the "Detailed Stock Analysis" section below. Western Digital Corp. (WDC): A big previous winner for the Hot List, gaining 27.7% from late-November to mid-January, this California-based firm is a leader in the hard drive and digital storage business. The 40-year-old company has a market cap of about $12.8 billion, and has raked in $15.6 billion in sales in the past year. It gets strong interest from my Peter Lynch-based model, and high marks from a number of other strategies. For more on the stock, see the "Detailed Stock Analysis" section below. Statoil ASA (STO): Based in Norway, this integrated oil and gas firm ($78 billion market cap) has operations in three dozen countries across the globe. It has raked in more than $125 billion in sales in the past year. Statoil gets high marks from my Peter Lynch- and James O'Shaughnessy-based models. For more on the stock, see the "Detailed Stock Analysis" section below. Saia, Inc. (SAIA): This Georgia-based transportation company offers a range of less-than-truckload, non-asset truckload, and logistic services. It operates 147 terminals in 34 states, and has 8,000 employees across the U.S. Saia ($600 million market cap) has taken in more than a billion in sales over the past year. It gets strong interest from my James O'Shaughnessy-based strategy. To learn more about it, scroll down to the "Detailed Stock Analysis" section below. News about Validea Hot List Stocks Lukoil (LUKOY): Lukoil is buying Hess Corporation's stake in a Russian subsidiary for $1.8 billion, The Wall Street Journal reported on April 1. Hess owns 90% of the subsidiary, Samara-Nafta, while the chairman of Yukos Oil Co., Simon Kukes, owns the other 10%. He will also sell his stake to Lukoil, the Journal stated, adding that total after-tax proceeds for the entire company will be $2 billion. The TJX Companies (TJX): TJX said on April 2 that it is upping its quarterly dividend by 26%. It also said it plans to continue its stock buyback program by making about $1.3 billion to $1.4 billion of share repurchases in fiscal 2014, the Associated Press reported. The Next Issue In two weeks, we will publish another issue of the Hot List, at which time we will take a closer look at my strategies and investment approach. If you have any questions, please feel free to contact us at hotlist@validea.com.

Current Portfolio Ticker Company Name Industry Guru Score LUKOY LUKOIL (ADR) Oil & Gas - Integrated 100 USNA USANA HEALTH SCIENCES, INC. Conglomerates 85 STO STATOIL ASA(ADR) Oil & Gas - Integrated 66 TEO TELECOM ARGENTINA S.A. (ADR) Communications Services 65 WDC WESTERN DIGITAL CORP. Computer Storage Devices 64 RDS.A ROYAL DUTCH SHELL PLC (ADR) Oil & Gas - Integrated 61 WRLD WORLD ACCEPTANCE CORP. Consumer Financial Services 60 HFC HOLLYFRONTIER CORP Oil & Gas Operations 60 SAIA SAIA INC Trucking 54 TJX THE TJX COMPANIES, INC. Retail (Apparel) 43 Ticker Market Cap Date Added Start Price Current Price Return LUKOY $53,072 2/15/2013 $66.54 $62.37 -6.3% USNA $654 12/21/2012 $33.83 $48.46 43.2% STO $76,767 4/12/2013 TBD $24.16 TBD TEO $2,579 3/15/2013 $15.19 $15.93 4.9% WDC $12,608 4/12/2013 TBD $52.39 TBD RDS.A $210,347 3/15/2013 $66.20 $65.38 -1.2% WRLD $1,031 2/15/2013 $78.66 $83.52 6.2% HFC $9,454 4/12/2013 TBD $46.46 TBD SAIA $579 4/12/2013 TBD $35.79 TBD TJX $35,283 10/26/2012 $40.73 $48.74 19.7%

Detailed Stock Analysis Disclaimer: The analysis is from Validea's selection and interpretation of content from the guru's book or published writings, and is not from nor endorsed by the guru. See Full Disclaimer LUKOY   |   USNA   |   STO   |   TEO   |   WDC   |   RDS.A   |   WRLD   |   HFC   |   SAIA   |   TJX   |   LUKOIL (ADR) Profile Strategy: Contrarian Investor Based on: David Dreman NK Lukoil OAO (Neftyanaya Kompaniya LUKOIL OAO or NK LUKOIL OJSC) is a Russia-based integrated oil and gas company. The Company is engaged in the business of oil exploration, production, refining, marketing and distribution. It is an owner of refineries, gas processing, petrochemical plants and gas stations network located in Russia, Eastern and Western Europe, as well as Africa. The Company's petroleum products are sold in the Russian Federation, the Commonwealth of Independent States (CIS) countries, Eastern and Western Europe, Asia and the United States. NK Lukoil OAO operates through numerous subsidiaries and affiliated companies. As of December 31, 2011, the Company's major shareholder was ING Bank (Eurasia) ZAO with a stake of 75.93%. In April 2013, the Company acquired a 100% of Samara-Nafta ZAO. Analysis Guru Score: 79% MARKET CAP: [PASS] Medium to large-sized companies (the largest 1500 companies) should be chosen, because they are more in the public eye. Furthermore, the investor is exposed to less risk of "accounting gimmickry", and companies of this size have more staying power. LUKOY has a market cap of $53,072 million, therefore passing the test. EARNINGS TREND: [FAIL] A company should show a rising trend in the reported earnings for the most recent quarters. LUKOY's EPS for the latest quarter is not greater than the prior quarter, (from earliest to most recent quarter) 4.55, 3.49. Hence the stock fails this test, but the investor should evaluate this company qualitatively to see if it qualifies under this methodology's "exception rule". EPS GROWTH RATE IN THE IMMEDIATE PAST AND FUTURE: [PASS] This methodology likes to see companies with an EPS growth rate higher than the S&P in the immediate past and a likelihood that this trend will continue in the near future. LUKOY passes this test as its EPS growth rate over the past 6 months (164.39%) has beaten that of the S&P (-6.02%). Unfortunately though, LUKOY's estimated EPS growth figures are unavailable and an opinion cannot be rendered on the second part of the test. This methodology would utilize four separate criteria to determine if LUKOY is a contrarian stock. In order to eliminate weak companies we have stipulated that the stock should pass at least two of the following four major criteria in order to receive "Some Interest". P/E RATIO: [PASS] The P/E of a company should be in the bottom 20% of the overall market. LUKOY's P/E of 4.41, based on trailing 12 month earnings, meets the bottom 20% criterion (below 9.70), and therefore passes this test. PRICE/CASH FLOW (P/CF) RATIO: [PASS] The P/CF of a company should be in the bottom 20% of the overall market. LUKOY's P/CF of 3.37 meets the bottom 20% criterion (below 5.39) and therefore passes this test. PRICE/BOOK (P/B) VALUE: [PASS] The P/B value of a company should be in the bottom 20% of the overall market. LUKOY's P/B is currently 0.64, which meets the bottom 20% criterion (below 0.78), and it therefore passes this test. PRICE/DIVIDEND (P/D) RATIO: [PASS] The P/D ratio for a company should be in the bottom 20% of the overall market (that is the yield should be in the top 20%). LUKOY's P/D of 17.12 meets the bottom 20% criterion (below 20.49 or yield above 3.7% ), and it therefore passes this test. This methodology maintains that investors should look for as many healthy financial ratios as possible to ascertain the financial strength of the company. These criteria are detailed below. CURRENT RATIO: [PASS] A prospective company must have a strong Current Ratio (greater than or equal to the average of it's industry [1.36] or greater than 2). This is one identifier of financially strong companies, according to this methodology. LUKOY's current ratio of 1.95 passes the test. PAYOUT RATIO: [FAIL] A good indicator that a company has the ability to raise its dividend is a low payout ratio. The payout ratio for LUKOY is 24.79%, while its historical payout ratio has been 15.20%. Therefore, it fails the payout criterion. RETURN ON EQUITY: [FAIL] The company should have a high ROE, as this helps to ensure that there are no structural flaws in the company. This methodology feels that the ROE should be greater than the top one third of ROE from among the top 1500 largest cap stocks, which is 17.17%, and would consider anything over 27% to be staggering. The ROE for LUKOY of 15.63% is not high enough to pass this criterion. PRE-TAX PROFIT MARGINS: [PASS] This methodology looks for pre-tax profit margins of at least 8%, and considers anything over 22% to be phenomenal. LUKOY's pre-tax profit margin is 9.86%, thus passing this criterion. YIELD: [PASS] The company in question should have a yield that is high and that can be maintained or increased. LUKOY's current yield is 5.84%, while the market yield is 2.61%. LUKOY passes this test. LOOK AT THE TOTAL DEBT/EQUITY: [PASS] The company must have a low Debt/Equity ratio, which indicates a strong balance sheet. The Debt/Equity ratio should not be greater than 20% or should be less than the average Debt/Equity for its industry of 32.48%. LUKOY's Total Debt/Equity of 9.04% is considered acceptable.   USANA HEALTH SCIENCES, INC. Profile Strategy: Small-Cap Growth Investor Based on: Motley Fool USANA Health Sciences, Inc. develops and manufactures science-based nutritional and personal care products. The Company has operations in 15 markets worldwide, where it distributes and sells its products by way of direct selling. The Company reports operations in two geographic regions: North America and Asia Pacific, which is further divided into three sub-regions; Southeast Asia/Pacific, Greater China, and North Asia. North America includes the United States, Canada, Mexico, and direct sales from the United States to the United Kingdom and the Netherlands. Southeast Asia/Pacific includes Australia, New Zealand, Singapore, Malaysia, and the Philippines; Greater China includes Hong Kong, Taiwan and China; and North Asia includes Japan and South Korea. The Company's customer base consists of two types of customers: Associates and Preferred Customers. As of December 31, 2011, the Company had 222,000 active Associates and 64,000 active Preferred Customers worldwide. Analysis Guru Score: 76% PROFIT MARGIN: [PASS] This methodology seeks companies with a minimum trailing 12 month after tax profit margin of 7%. The companies that pass this criterion have strong positions within their respective industries and offer greater shareholder returns. A true test of the quality of a company is that they can sustain this margin. USNA's profit margin of 10.24% passes this test. RELATIVE STRENGTH: [FAIL] The investor must look at the relative strength of the company in question. Companies whose relative strength is 90 or above (that is, the company outperforms 90% or more of the market for the past year), are considered attractive. Companies whose price has been rising much quicker than the market tend to keep rising. USNA, with a relative strength of 79, fails this test. COMPARE SALES AND EPS GROWTH TO THE SAME PERIOD LAST YEAR: [FAIL] Companies must demonstrate both revenue and net income growth of at least 25% as compared to the prior year. These growth rates give you the dynamic companies that you are looking for. These rates for USNA (47.13% for EPS, and 15.47% for Sales) are not good enough to pass. INSIDER HOLDINGS: [PASS] USNA's insiders should own at least 10% (they own 53.69% ) of the company's outstanding shares which is extremely attractive since the minimum requirement is 10%. A high percentage indicates that the insiders are confident that the company will do well. CASH FLOW FROM OPERATIONS: [PASS] A positive cash flow is typically used for internal expansion, acquisitions, dividend payments, etc. A company that generates rather than consumes cash is in much better shape to fund such activities on their own, rather than needing to borrow funds to do so. USNA's free cash flow of $5.65 per share passes this test. PROFIT MARGIN CONSISTENCY: [PASS] USNA's profit margin has been consistent or even increasing over the past three years (Current year: 10.24%, Last year: 8.72%, Two years ago: 8.82%), passing the requirement. It is a sign of good management and a healthy and competitive enterprise. R&D AS A PERCENTAGE OF SALES: [NEUTRAL] This criterion is not critically important for companies that are not high-tech or medical stocks because they are not as R&D dependant as companies within those sectors. Not much emphasis should be placed on this test in USNA's case. CASH AND CASH EQUIVALENTS: [FAIL] USNA's level of cash and cash equivalents per sales, 10.92 %, does not pass this criteria of roughly 20%(a number we determined to be appropriate based on various examples). USNA will have a more difficult time paying off debt (if it has any) or acquiring other companies than a company that passes this criteria. INVENTORY TO SALES: [PASS] This methodology strongly believes that companies, especially small ones, should have tight control over inventory. It's a warning sign if a company's inventory relative to sales increases significantly when compared to the previous year. Up to a 30% increase is allowed, but no more. Inventory to Sales for USNA was 6.35% last year, while for this year it is 5.62%. Since the inventory to sales is decreasing by -0.73% the stock passes this criterion. ACCOUNT RECEIVABLE TO SALES: [PASS] This methodology wants to make sure that a company's accounts receivable do not get significantly out of line with sales. It's a warning sign if a company's accounts receivable relative to sales increases significantly when compared to the previous year. Up to a 30% increase is allowed, but no more. Accounts Receivable to Sales for USNA was 1.65% last year, while for this year it is 2.17%. Although the AR to sales is rising, it is below the max 30% that is allowed. The investor can still consider the stock if all other criteria appear very attractive. LONG TERM DEBT/EQUITY RATIO: [PASS] USNA's trailing twelve-month Debt/Equity ratio (0.00%) is at a great level according to this methodology because the superior companies that you are looking for don't need to borrow money in order to grow. "THE FOOL RATIO" (P/E TO GROWTH): [PASS] The "Fool Ratio" is an extremely important aspect of this analysis. If the company's Fool Ratio is between 0.5 and 0.65 (USNA's is 0.52), the company demonstrates excellence in its fundamentals and have soundly beat the earnings estimates. USNA passes this test. The following criteria for USNA are less important which means you would place less emphasis on them when making your investment decision using this strategy: AVERAGE SHARES OUTSTANDING: [PASS] USNA has not been significantly increasing the number of shares outstanding within recent years which is a good sign. USNA currently has 14.0 million shares outstanding. This means the company is not taking any measures, with regards to the number of shares, that will dilute or devalue the stock. SALES: [FAIL] Companies with sales less than $500 million should be chosen. It is among these small-cap stocks that investors can find "an uncut gem", ones that institutions won't be able to buy yet. USNA's sales of $648.7 million based on trailing 12 month sales, are too high and would therefore fail the test. It is companies with $500 million or less in sales that are most likely to double or triple in size in the next few years. DAILY DOLLAR VOLUME: [PASS] USNA passes the Daily Dollar Volume (DDV of $9.7 million) test. It is required that this number be less than $25 million because these are the stocks that remain relatively undiscovered by institutions. "You'll be scoring touchdowns against the big guys on your turf." PRICE: [PASS] This is a very insignificant criterion for this methodology. But basically, low prices are chosen because "small numbers multiply more rapidly than large ones" and the potential for big returns expands. USNA with a price of $48.46 passes the price test, even though it doesn't fall in the preferred range. The price should be above $7 in order to eliminate penny stocks and below $20 since most stocks in this price range are undiscovered by the institutions. INCOME TAX PERCENTAGE: [PASS] USNA's income tax paid expressed as a percentage of pretax income this year was (32.50%) and last year (34.50%) are greater than 20% which is an acceptable level. If the tax rate is below 20% this could mean that the earnings that were reported were unrealistically inflated due to the lower level of income tax paid. This is a concern.   STATOIL ASA(ADR) Profile Strategy: Value Investor Based on: Benjamin Graham Statoil ASA (Statoil) is an integrated energy company primarily engaged in oil and gas exploration and production activities. As of December 31, 2011, the Company had business operations in 41 countries and territories. Effective from January 1, 2011, the Company's segments were Development and Production Norway; Development and Production International; Marketing, Processing and Renewable Energy; Fuel & Retail, Other. As of 31 December 2011, the Company had proved reserves of 2,276 million barrels (mmbbl) and 3,150 billion cubic meters (bcm) (equivalent to 17,681 trillion cubic feet (tcf)) of natural gas, corresponding to aggregate proved reserves of 5,426 mmboe. In June 2012, the Company divested its 54% interest in Statoil Fuel & Retail ASA to Alimentation Couche-Tard. Analysis Guru Score: 71% SECTOR: [PASS] STO is neither a technology nor financial Company, and therefore this methodology is applicable. SALES: [PASS] The investor must select companies of "adequate size". This includes companies with annual sales greater than $340 million. STO's sales of $126,830.5 million, based on trailing 12 month sales, pass this test. CURRENT RATIO: [FAIL] The current ratio must be greater than or equal to 2. Companies that meet this criterion are typically financially secure and defensive. STO's current ratio of 1.12 fails the test. LONG-TERM DEBT IN RELATION TO NET CURRENT ASSETS: [FAIL] For industrial companies, long-term debt must not exceed net current assets (current assets minus current liabilities). Companies that do not meet this criterion lack the financial stability that this methodology likes to see. The long-term debt for STO is $17,707.5 million, while the net current assets are $3,418.8 million. STO fails this test. LONG-TERM EPS GROWTH: [PASS] Companies must increase their EPS by at least 30% over a ten-year period and EPS must not have been negative for any year within the last 5 years. Companies with this type of growth tend to be financially secure and have proven themselves over time. STO's EPS growth over that period of 116.5% passes the EPS growth test. P/E RATIO: [PASS] The Price/Earnings (P/E) ratio, based on the greater of the current PE or the PE using average earnings over the last 3 fiscal years, must be "moderate", which this methodology states is not greater than 15. Stocks with moderate P/Es are more defensive by nature. STO's P/E of 7.30 (using the 3 year PE) passes this test. PRICE/BOOK RATIO: [PASS] The Price/Book ratio must also be reasonable. That is, the Price/Book multiplied by P/E cannot be greater than 22. STO's Price/Book ratio is 1.38, while the P/E is 7.30. STO passes the Price/Book test.   TELECOM ARGENTINA S.A. (ADR) Profile Strategy: Price/Sales Investor Based on: Kenneth Fisher Telecom Argentina SA, (Telecom), is an Argentina-based company primarily engaged in the provision of national fixed-line telecommunication services, international long-distance service, data transmission and Internet services, as well as mobile telephony. The Company also offers such solutions as online business and Web hosting, virtual private network (VPN), mobile operating systems developed by Microsoft and Blackberry, toll-free telephone numbers, call centers and voice over Internet protocol (VoIP) line, as well as other services mainly aimed at corporate clients. As of December 31, 2012, the Company owned its subsidiaries structured in two business segments, Fixed Telephony, which comprised Telecom Argentina USA Inc and Micro Sistemas SA; and Mobile Services, with Telecom Personal SA, Nucleo SA and Springville SA. Analysis Guru Score: 100% PRICE/SALES RATIO: [PASS] The prospective company should have a low Price/Sales ratio. Non-cyclical (non-Smokestack) companies with Price/Sales ratios below 0.75 are tremendous values and should be sought. TEO's P/S of 0.63 based on trailing 12 month sales, is below 0.75 which is considered quite attractive. It passes this methodology's P/S ratio test with flying colors. TOTAL DEBT/EQUITY RATIO: [PASS] Less debt equals less risk according to this methodology. TEO's Debt/Equity of 1.51% is acceptable, thus passing the test. PRICE/RESEARCH RATIO: [PASS] This methodology considers companies in the Technology and Medical sectors to be attractive if they have low Price/Research ratios. TEO is neither a Technology nor Medical company. Therefore the Price/Research ratio is not available and, hence, not much emphasis should be placed on this particular variable. PRELIMINARY GRADE: Some Interest in TEO At this Point Is TEO a "Super Stock"? YES PRICE/SALES RATIO: [PASS] The prospective company should have a low Price/Sales ratio. Non-cyclical(non-Smokestack) companies with Price/Sales ratios below .75 are tremendous values and should be sought.TEO's P/S ratio of 0.63 is below .75 which is considered extremely attractive. It passes this methodology's P/S ratio test with flying colors. LONG-TERM EPS GROWTH RATE: [PASS] This methodology looks for companies that have an inflation adjusted EPS growth rate greater than 15%. TEO's inflation adjusted EPS growth rate of 27.46% passes the test. FREE CASH PER SHARE: [PASS] This methodology looks for companies that have a positive free cash per share. Companies should have enough free cash available to sustain three years of losses. This is based on the premise that companies without cash will soon be out of business. TEO's free cash per share of 0.61 passes this criterion. THREE YEAR AVERAGE NET PROFIT MARGIN: [PASS] This methodology looks for companies that have an average net profit margin of 5% or greater over a three year period. TEO, whose three year net profit margin averages 12.75%, passes this evaluation.   WESTERN DIGITAL CORP. Profile Strategy: Price/Sales Investor Based on: Kenneth Fisher Western Digital Corporation (WD) is a provider of solutions for the collection, storage, management, protection and use of digital content, including audio and video. Its principal products are hard drives, which are devices that use one or more rotating magnetic disks (magnetic media) to store and allow access to data. Its hard drives are used in desktop and notebook computers, corporate and cloud computing data centers, home entertainment equipment and stand-alone consumer storage devices. In addition to hard drives, its other products include solid-state drives and home entertainment and networking products. Effective March 8, 2012, it acquired Viviti Technologies Ltd. In May 2012, the Company completed the divestiture of certain 3.5-inch hard drive assets to Toshiba Corporation. As part of its deal with Toshiba, WD also completed its purchase of Toshiba Storage Device (Thailand) Company Limited (TSDT), which manufactured hard drives. Analysis Guru Score: 90% PRICE/SALES RATIO: [PASS] The prospective company should have a low Price/Sales ratio. Non-cyclical (non-Smokestack) companies with Price/Sales ratio between .75 and 1.5 are good values. WDC's P/S ratio of 0.81 based on trailing 12 month sales, falls within the "good values" range for non-cyclical companies and is considered attractive. TOTAL DEBT/EQUITY RATIO: [PASS] Less debt equals less risk according to this methodology. WDC's Debt/Equity of 25.80% is acceptable, thus passing the test. PRICE/RESEARCH RATIO: [PASS] This methodology considers Technology and Medical companies with low Price/Research ratios to be attractive. This ratio indicates how much a market values a company's Research and Development (R&D). Companies with Price/Research ratios between 10 and 15 are on the borderline. A Price/Research ratio above 15 indicates the company spends too little on R&D or is extremely overvalued. Investors should seek those between 5 and 10. WDC's Price/Research ratio of 11.95 is considered "OK". PRELIMINARY GRADE: Some Interest in WDC At this Point Is WDC a "Super Stock"? NO PRICE/SALES RATIO: [FAIL] The prospective company should have a low Price/Sales ratio. To be considered a "Super Stock", non-cyclical (non-Smokestack) companies should have Price/Sales ratios below .75. However, WDC, who has a P/S of 0.81, does not fall within the "Super Stock" range. It does fall between 0.75 and 1.5, which is considered the "good values" range for non-cyclical companies. Nonetheless, it does not pass this "Super Stock" criterion. LONG-TERM EPS GROWTH RATE: [PASS] This methodology looks for companies that have an inflation adjusted EPS growth rate greater than 15%. WDC's inflation adjusted EPS growth rate of 25.01% passes the test. FREE CASH PER SHARE: [PASS] This methodology looks for companies that have a positive free cash per share. Companies should have enough free cash available to sustain three years of losses. This is based on the premise that companies without cash will soon be out of business. WDC's free cash per share of 9.59 passes this criterion. THREE YEAR AVERAGE NET PROFIT MARGIN: [PASS] This methodology looks for companies that have an average net profit margin of 5% or greater over a three year period. WDC, whose three year net profit margin averages 11.52%, passes this evaluation.   ROYAL DUTCH SHELL PLC (ADR) Profile Strategy: P/E/Growth Investor Based on: Peter Lynch Royal Dutch Shell plc (Shell) is an independent oil and gas company. The Company owns, directly or indirectly, investments in the numerous companies constituting Shell. Shell is engaged worldwide in the principal aspects of the oil and gas industry and also has interests in chemicals and other energy-related businesses. The Company operates in three segments: Upstream, Downstream and Corporate. Upstream combines the operating segments Upstream International and Upstream Americas, which are engaged in searching for and recovering crude oil and natural gas; the liquefaction and transportation of gas; the extraction of bitumen from oil sands that is converted into synthetic crude oil, and wind energy. Downstream is engaged in manufacturing; distribution and marketing activities for oil products and chemicals. Corporate represents the key support functions, comprising holdings and treasury, headquarters, central functions and Shells self-insurance activities. Analysis Guru Score: 91% DETERMINE THE CLASSIFICATION: According to this methodology, RDS.A is a "Slow Grower", based on its single digit earnings growth of 8.12%, based on the average of the 3, 4 and 5 year historical eps growth rates. SALES: [PASS] RDS.A would fall into the "Dividend Payers" category according to this methodology. The first requirement of a Slow Grower is that its sales exceed one billion. RDS.A's sales are $467,153 million. It passes the test. INVENTORY TO SALES: [PASS] When inventories increase faster than sales, it is a red flag. However an increase of up to 5% is considered bearable if all other ratios appear attractive. Inventory to sales for RDS.A was 6.16% last year, while for this year it is 6.59%. Since inventory has been rising, this methodology would not look favorably at the stock but would not completely eliminate it from consideration as the inventory increase (0.43%) is below 5%. YIELD COMPARED TO THE S&P 500: [PASS] This methodology also maintains that the Yield of a "Slow Grower" should be high, which includes being higher than the S&P average (currently 2.27%), and at least 3%. This yield is required because dividends are the main reason for investing in "Slow Growers". The yield for RDS.A is 5.26% so it passes this test. YIELD ADJUSTED P/E/GROWTH (PEG) RATIO: [PASS] This methodology would consider the Yield-adjusted P/E/G ratio for RDS.A of 0.58, based on the average of the 3, 4 and 5 year historical eps growth rates, to be good. TOTAL DEBT/EQUITY RATIO: [PASS] This methodology would consider the Debt/Equity ratio for RDS.A (20.03%) to be acceptable (equity is three to ten times debt). This ratio is one quick way to determine the financial strength of the company. FREE CASH FLOW: [NEUTRAL] The Free Cash Flow/Price ratio, though not a requirement, is considered a bonus if it is above 35%. A positive Cash Flow (the higher the better) separates a wonderfully reliable investment from a shaky one. This methodology prefers not to invest in companies that rely heavily on capital spending. This ratio for RDS.A (3.01%) is too low to add to the attractiveness of the stock. Keep in mind, however, that it does not adversely affect the company as it is a bonus criteria. NET CASH POSITION: [NEUTRAL] Another bonus for a company is having a Net Cash/Price ratio above 30%. Lynch defines net cash as cash and marketable securities minus long term debt. According to this methodology, a high value for this ratio dramatically cuts down on the risk of the security. The Net Cash/Price ratio for RDS.A (-3.72%) is too low to add to the attractiveness of this company. Keep in mind, however, that it does not adversely affect the company as it is a bonus criteria.   WORLD ACCEPTANCE CORP. Profile Strategy: Growth Investor Based on: Martin Zweig World Acceptance Corporation operates a small-loan consumer finance business in 12 states and Mexico. The Company is engaged in the small-loan consumer finance business, offering short-term small loans, medium-term larger loans, related credit insurance and ancillary products and services to individuals. As of March 31, 2012, the Company offered standardized installment loans through 1,137 offices in South Carolina, Georgia, Texas, Oklahoma, Louisiana, Tennessee, Illinois, Missouri, New Mexico, Kentucky, Alabama, Wisconsin, and Mexico. The Company serves individuals with limited access to consumer credit from banks, credit unions, other consumer finance businesses and credit card lenders. In the United States offices, the Company also offers income tax return preparation services to its customers and others. Analysis Guru Score: 85% P/E RATIO: [PASS] The P/E of a company must be greater than 5 to eliminate weak companies, but not more than 3 times the current Market P/E because the situation is much too risky, and never greater than 43. WRLD's P/E is 11.18, based on trailing 12 month earnings, while the current market PE is 18.00. Therefore, it passes the first test. REVENUE GROWTH IN RELATION TO EPS GROWTH: [FAIL] Revenue Growth must not be substantially less than earnings growth. For earnings to continue to grow over time they must be supported by a comparable or better sales growth rate and not just by cost cutting or other non-sales measures. WRLD's revenue growth is 11.99%, while it's earnings growth rate is 22.74%, based on the average of the 3, 4 and 5 year historical eps growth rates. Therefore, WRLD fails this criterion. SALES GROWTH RATE: [PASS] Another important issue regarding sales growth is that the rate of quarterly sales growth is rising. To evaluate this, the change from this quarter last year to the present quarter (10.1%) must be examined, and then compared to the previous quarter last year compared to the previous quarter (5.5%) of the current year. Sales growth for the prior must be greater than the latter. For WRLD this criterion has been met. The earnings numbers of a company should be examined from various different angles. Three of these angles are stability in the trend of earnings, earnings persistence, and earnings acceleration. To evaluate stability, the stock has to pass the following four criteria. CURRENT QUARTER EARNINGS: [PASS] The first of these criteria is that the current EPS be positive. WRLD's EPS ($1.58) pass this test. QUARTERLY EARNINGS ONE YEAR AGO: [PASS] The EPS for the quarter one year ago must be positive. WRLD's EPS for this quarter last year ($1.30) pass this test. POSITIVE EARNINGS GROWTH RATE FOR CURRENT QUARTER: [PASS] The growth rate of the current quarter's earnings compared to the same quarter a year ago must also be positive. WRLD's growth rate of 21.54% passes this test. EARNINGS GROWTH RATE FOR THE PAST SEVERAL QUARTERS: [PASS] Compare the earnings growth rate of the previous three quarters with long-term EPS growth rate. Earnings growth in the previous 3 quarters should be at least half of the long-term EPS growth rate. Half of the long-term EPS growth rate for WRLD is 11.37%. This should be less than the growth rates for the 3 previous quarters, which are 20.38%, 28.35%, and 13.16%. WRLD passes this test, which means that it has good, reasonably steady earnings. This strategy looks at the rate which earnings grow and evaluates this rate of growth from different angles. The 4 tests immediately following are detailed below. EPS GROWTH FOR CURRENT QUARTER MUST BE GREATER THAN PRIOR 3 QUARTERS: [PASS] If the growth rate of the prior three quarter's earnings, 20.20%, (versus the same three quarters a year earlier) is less than the growth rate of the current quarter earnings, 21.54%, (versus the same quarter one year ago) then the stock passes. EPS GROWTH FOR CURRENT QUARTER MUST BE GREATER THAN THE HISTORICAL GROWTH RATE: [FAIL] The EPS growth rate for the current quarter, 21.54% must be greater than or equal to the historical growth which is 22.74%. Since this is not the case WRLD would therefore fail this test. EARNINGS PERSISTENCE: [PASS] Companies must show persistent yearly earnings growth. To fulfill this requirement a company's earnings must increase each year for a five year period. WRLD, whose annual EPS growth before extraordinary items for the previous 5 years (from the earliest to the most recent fiscal year) were 2.89, 3.43, 4.45, 5.63 and 6.59, passes this test. LONG-TERM EPS GROWTH: [PASS] One final earnings test required is that the long-term earnings growth rate must be at least 15% per year. WRLD's long-term growth rate of 22.74%, based on the average of the 3, 4 and 5 year historical eps growth rates, passes this test. INSIDER TRANSACTIONS: [PASS] A factor that adds to a stock's attractiveness is if insider buy transactions number 3 or more, while insider sell transactions are zero. Zweig calls this an insider buy signal. For WRLD, this criterion has not been met (insider sell transactions are 179, while insiders buying number 152). Despite the fact that insider sells out number insider buys for this company, Zweig considers even one insider buy transaction enough to prevent an insider sell signal, therefore there is not an insider sell signal and the stock passes this criterion.   HOLLYFRONTIER CORP Profile Strategy: Value Investor Based on: Benjamin Graham HollyFrontier Corporation (HollyFrontier), formerly Holly Corporation, is a petroleum refiner, which produces light products, such as gasoline, diesel fuel, jet fuel, specialty lubricant products, and specialty and modified asphalt. HollyFrontier operates in two segments: Refining and Holly Energy Partners, L.P. (HEP). The Refining segment includes the operations of its El Dorado, Tulsa, Navajo, Cheyenne and Woods Cross Refineries and NK Asphalt. The HEP segment involves all of the operations of HEP. As of December 31, 2011, it operated five refineries having a combined crude oil processing capacity of 443,000 barrels per day that serve markets throughout the Mid-Continent, Southwest and Rocky Mountain regions of the United States. The Company merged with Frontier Oil Corporation (Frontier), on July 1, 2011. On November 9, 2011, HEP acquired from the Company certain tankage, loading rack and crude receiving assets located at its El Dorado and Cheyenne Refineries. Analysis Guru Score: 100% SECTOR: [PASS] HFC is neither a technology nor financial Company, and therefore this methodology is applicable. SALES: [PASS] The investor must select companies of "adequate size". This includes companies with annual sales greater than $340 million. HFC's sales of $20,090.7 million, based on trailing 12 month sales, pass this test. CURRENT RATIO: [PASS] The current ratio must be greater than or equal to 2. Companies that meet this criterion are typically financially secure and defensive. HFC's current ratio of 2.70 passes the test. LONG-TERM DEBT IN RELATION TO NET CURRENT ASSETS: [PASS] For industrial companies, long-term debt must not exceed net current assets (current assets minus current liabilities). Companies that meet this criterion display one of the attributes of a financially secure organization. The long-term debt for HFC is $1,336.2 million, while the net current assets are $2,815.8 million. HFC passes this test. LONG-TERM EPS GROWTH: [PASS] Companies must increase their EPS by at least 30% over a ten-year period and EPS must not have been negative for any year within the last 5 years. Companies with this type of growth tend to be financially secure and have proven themselves over time. HFC's EPS growth over that period of 1,416.3% passes the EPS growth test. P/E RATIO: [PASS] The Price/Earnings (P/E) ratio, based on the greater of the current PE or the PE using average earnings over the last 3 fiscal years, must be "moderate", which this methodology states is not greater than 15. Stocks with moderate P/Es are more defensive by nature. HFC's P/E of 8.80 (using the 3 year PE) passes this test. PRICE/BOOK RATIO: [PASS] The Price/Book ratio must also be reasonable. That is, the Price/Book multiplied by P/E cannot be greater than 22. HFC's Price/Book ratio is 1.56, while the P/E is 8.80. HFC passes the Price/Book test.   SAIA INC Profile Strategy: Growth/Value Investor Based on: James P. O'Shaughnessy Saia, Inc. (Saia) is an asset-based trucking company that provides regional and interregional less-than-truckload (LTL) services and selected longer haul LTL, along with limited truckload (TL) service solutions to a base of customers and industries across the United States, including the retail, chemical and manufacturing industries through its wholly owned regional transportation subsidiary, Saia Motor Freight Line, LLC (Saia Motor Freight). Saia Motor Freight is a multi-regional LTL carrier that serves 34 states in the South, Southwest, Midwest, Pacific Northwest and West. Saia Motor Freight specializes in offering its customers a range of regional and interregional LTL services, including time-definite and expedited options. Saia Motor Freight primarily provides its customers with solutions for shipments between 100 and 10,000 pounds. In July 2012, the Company acquired Robart Transportation, Inc. and its subsidiary, The RL Services Group, LLC (the Robart Companies). Analysis Guru Score: 100% MARKET CAP: [PASS] The first requirement of the Cornerstone Growth Strategy is that the company has a market capitalization of at least $150 million. This will screen out the companies that are too illiquid for most investors, but still include a small growth company. SAIA, with a market cap of $579 million, passes this criterion. EARNINGS PER SHARE PERSISTENCE: [PASS] The Cornerstone Growth methodology looks for companies that show persistent earnings growth without regard to magnitude. To fulfill this requirement, a company's earnings must increase each year for a five year period. SAIA, whose annual EPS before extraordinary items for the last 5 years (from earliest to the most recent fiscal year) were -1.48, -0.67, 0.12, 0.70 and 1.94, passes this test. PRICE/SALES RATIO: [PASS] The Price/Sales ratio should be below 1.5. This value criterion, coupled with the growth criterion, identify growth stocks that are still cheap to buy. SAIA's Price/Sales ratio of 0.53, based on trailing 12 month sales, passes this criterion. RELATIVE STRENGTH: [PASS] The final criterion for the Cornerstone Growth Strategy requires that the Relative Strength of the company be among the top 50 of the stocks screened using the previous criterion. This gives you the opportunity to buy the growth stocks you are searching for just as the market is embracing them. SAIA, whose relative strength is 94, is in the top 50 and would pass this last criterion.   THE TJX COMPANIES, INC. Profile Strategy: Growth/Value Investor Based on: James P. O'Shaughnessy The TJX Companies, Inc. (TJX) is the off-price apparel and home fashions retailer in the United States and worldwide. As of January 28, 2012, the Company operated in four business segments. It has two segments in the United States, Marmaxx (T.J. Maxx and Marshalls) and HomeGoods; one in Canada, TJX Canada (Winners, Marshalls and HomeSense) and one in Europe, TJX Europe (T.K. Maxx and HomeSense). As a result of the consolidation of the A.J. Wright chain, all A.J. Wright stores ceased operations by the end of February 2011. It completed the consolidation of A.J. Wright, converting 90 of the A.J. Wright stores to T.J. Maxx, Marshalls or HomeGoods banners and closed the remaining 72 stores, two distribution centers and home office. In December 2012, the Company acquired Sierra Trading Post, an off-price Internet retailer. Analysis Guru Score: 75% MARKET CAP: [PASS] The first requirement of the Cornerstone Growth Strategy is that the company has a market capitalization of at least $150 million. This will screen out the companies that are too illiquid for most investors, but still include a small growth company. TJX, with a market cap of $35,283 million, passes this criterion. EARNINGS PER SHARE PERSISTENCE: [PASS] The Cornerstone Growth methodology looks for companies that show persistent earnings growth without regard to magnitude. To fulfill this requirement, a company's earnings must increase each year for a five year period. TJX, whose annual EPS before extraordinary items for the last 5 years (from earliest to the most recent fiscal year) were 1.04, 1.42, 1.65, 1.93 and 2.55, passes this test. PRICE/SALES RATIO: [PASS] The Price/Sales ratio should be below 1.5. This value criterion, coupled with the growth criterion, identify growth stocks that are still cheap to buy. TJX's Price/Sales ratio of 1.36, based on trailing 12 month sales, passes this criterion. RELATIVE STRENGTH: [FAIL] The final criterion for the Cornerstone Growth Strategy requires that the Relative Strength of the company be among the top 50 of the stocks screened using the previous criterion. This gives you the opportunity to buy the growth stocks you are searching for just as the market is embracing them. TJX has a relative strength of 72. This does not pass the final criterion. As a result, this methodology would not consider the stock even though it passed the previous three criteria.   Watch List The Watch List contains the highest scoring stocks according to our guru consensus system that are not currently in the Hot List portfolio. We provide this list both for informational purposes and for investors who are not comfortable with a portfolio of ten stocks. Ticker Company Name Industry Guru Score LEA LEAR CORPORATION Auto & Truck Parts 39 NTES NETEASE, INC (ADR) Business Services 38 CEO CNOOC LIMITED (ADR) Oil & Gas Operations 37 WSM WILLIAMS-SONOMA, INC. Furniture & Fixtures 35 INTC INTEL CORPORATION Semiconductors 34 ECPG ENCORE CAPITAL GROUP, INC. Misc. Financial Services 33 HIBB HIBBETT SPORTS, INC. Retail (Specialty) 33 ROST ROSS STORES, INC. Retail (Apparel) 32 VLO VALERO ENERGY CORPORATION Oil & Gas Operations 31 SCL STEPAN COMPANY Chemicals - Plastics & Rubber 31

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The names of individuals (i.e., the 'gurus') appearing in this report are for identification purposes of his methodology only, as derived by Validea.com from published sources, and are not intended to suggest or imply any affiliation with or endorsement or even agreement with this report personally by such gurus, or any knowledge or approval by such persons of the content of this report. All trademarks, service marks and tradenames appearing in this report are the property of their respective owners, and are likewise used for identification purposes only. Validea is not registered as a securities broker-dealer or investment advisor either with the U.S. Securities and Exchange Commission or with any state securities regulatory authority. Validea is not responsible for trades executed by users of this site based on the information included herein. The information presented on this website does not represent a recommendation to buy or sell stocks or any financial instrument nor is it intended as an endorsement of any security or investment. The information on this website is generic by nature and is not personalized to the specific situation of any individual. The user therefore bears complete responsibility for their own investment research and should seek the advice of a qualified investment professional prior to making any investment decisions. Performance results are based on model portfolios and do not reflect actual trading. Actual performance will vary based on a variety of factors, including market conditions and trading costs. Past performance is not necessarily indicative of future results. Individual stocks mentioned throughout this web site may be holdings in the managed portfolios of Validea Capital Management, a separate asset management firm founded by Validea.com founder John Reese. Validea Capital Management, which is a separate legal entity and an SEC registered investment advisory firm, uses, in part, the strategies on the web site to select stocks for its clients.